The following discussion should be read in conjunction with our consolidated financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward-looking statements are based upon estimates, forecasts, and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by us, or on our behalf. We disclaim any obligation to update forward-looking statements.

Overview

We were incorporated in the State of Nevada under the name ?UA Granite Corporation? on February 14, 2013. Our Articles of Incorporation initially authorized us to issue up to 75,000,000 shares of common stock, par value $0.00001 per share. On April 30, 2018, upon approval by our Board of Directors and majority stockholders on April 27, 2018, we filed Amended and Restated Articles of Incorporation with the Nevada Secretary of State, with a delayed effective date of May 15, 2018, increasing the number of authorized shares of common stock from 75,000,000 shares to 200,000,000 shares. In connection with the amendment and restatement of our Articles of Incorporation, our Board of Directors and majority stockholders also approved and adopted the Amended and Restated Bylaws of the Company on April 27, 2018. Effective May 31, 2018, pursuant to our Amended and Restated Articles of Incorporation and upon completion of processing by the Financial Industry Regulatory Authority (?FINRA?), we changed the name of our Company from ?UA Granite Corporation? to ?Vortex Blockchain Technologies Inc.? in anticipation of a change of our business plan and direction. Also effective May 31, 2018, we effected a 15-for-1 forward stock split of all our issued and outstanding common stock, which increased the number of issued and outstanding shares of common stock from 1,400,000 to 21,000,000.

We are a development-stage company with limited current revenues, approximately half a million dollars in assets, and we have incurred losses since inception. Our limited start-up operations have consisted of the formation of our Company, development of our business plan, efforts to raise capital and maintaining our public company reporting requirements. In October of 2018 we completed a reverse merger with Vortex Network LLC and are now operating as a cryptocurrency holding company engaged in the business of mining crypto assets. In addition to its mining operation, Vortex Network was developing a variety of applications in the cryptocurrency space, in both the software and hardware spheres, including cloud mining, blockchain hardware and software development, and a cryptocurrency wallet and exchange.

Share Exchange Agreement

On October 17, 2018, the Registrant entered into a Share Exchange Agreement (the ?Exchange Agreement?) with Vortex Network and the Selling Members. Pursuant to the terms and conditions of the Exchange Agreement, the Selling Members agreed to voluntarily exchange all of the outstanding membership interests of Vortex for 65,000,000 shares of common stock of the Registrant. The Exchange Agreement was approved by the boards of directors or managers of each of the Registrant and Vortex, and by the Selling Members.

The Exchange Agreement includes customary representations, warranties and covenants of the Registrant, Vortex and the Selling Members made to each other as of specific dates. The assertions embodied in those representations and warranties were made solely for purposes of the Exchange Agreement and are not intended to provide factual, business, or financial information about the Registrant, Vortex and the Selling Members. Moreover, some of those representations and warranties (i) may not be accurate or complete as of any specified date, (ii) may be subject to a contractual standard of materiality different from those generally applicable to stockholders or different from what a stockholder might view as material, (iii) may have been used for purposes of allocating risk among the Registrant, Vortex and the Selling Members, rather than establishing matters as facts, or (iv) may have been qualified by certain disclosures not reflected in the Exchange Agreement that were made to the other party in connection with the negotiation of the Exchange Agreement and generally were solely for the benefit of the parties to that agreement. The Exchange Agreement should not be read alone, but should instead be read in conjunction with the other information regarding the Registrant and Vortex that has been, is or will be contained in, or incorporated by reference into, the Forms 10-K, Forms 10-Q, Forms 8-K, proxy statements and other documents that the Registrant files with the Securities and Exchange Commission (the ?SEC?).

The Exchange Agreement provides for the resignation of Angel Luis Reynoso Vasquez from all positions as an officer and director of the Registrant, and the appointment of new officers and directors, effective as of the closing of the Exchange Transaction (the ?Closing?).







Results of Operations

During the year ended March 31, 2019, we focused on internal development of our hardware and software plans, limited bitcoin mining, and satisfying our ongoing obligations as a public reporting company.

From February 14, 2013 (the date of our inception) to March 31, 2019, we have earned only limited revenues. We expect to continue to incur losses over the next twelve months, or until we are able to fully develop and carry out our new business opportunity that enables us to generate revenues.

Comparison of Year Ended March 31, 2019 and March 31, 2018

Our operations for the year ended March 31, 2019 and March 31, 2018 can be summarized as follows:




Year Ending
March 31, 2019
Year Ending
March 31, 2018
Revenue
 $
87,568
 $
-



Operating Expenses

848,595

196,493



Interest Expense

-

-



Net loss
 $
(761,027)
 $
(196,493)

During the year ended March 31, 2019, we incurred $848,595 in operating expenses, compared to $196,493 in operating expenses during the year ended March 31, 2018. The increase in operating expenses can be attributed to an increase in legal and accounting expenses related to merger and assuming the operations of Vortex Network and their existing staff.

We incurred a net loss of $761,027 for the year ended March 31, 2019, compared to a net loss of $196,493 for the year ended March 31, 2018. The increase in net loss over the comparable years ended March 31, 2019 and 2018 can be attributed to an increase in operating expenses without generating sufficient revenues to offset those expenses.

Liquidity and Capital Resources

Balance Sheets

As of March 31, 2019, we had $41,708 in cash and total assets of $617,890. As of March 31, 2018, we had $308,387 in cash and total assets of $1,502,234. The assets are primarily infrastructure and bitcoin mining equipment.

As of March 31, 2019, we had total liabilities in the amount of $659,728, compared to total liabilities in the amount of $824,194 as of March 31, 2018. The decrease in our total liabilities and increase in our working capital deficit is due to an increase in accounts payable and accrued liabilities and amounts due to our director, as we had limited cash flows to repay outstanding obligations as they became due.

As of March 31, 2019, our accumulated deficit was $1,085,355 compared to an accumulated deficit of $72,977 as of March 31, 2018. The change is attributed to assets held by the merger company Vortex Network, LLC which are now entirely part of the Company Vortex Blockchain Technologies, Inc.








Cash Flows

Cash Used in Operating Activities

During the year ended March 31, 2019, we used $432,447 in cash for operating activities, compared to $710,188 in cash provided for operating activities during the year ended March 31, 2018. The increase in the amount of cash used for operating activities relates primarily from the acquisition of assets in the merger. We cannot compare these to the previous shell company?s 2017 YE as they are now meaningless.

Cash Used in Investing Activities

During the period from February 14, 2013 (inception) to March 31, 2019, the Company has not engaged in any investing activities. We expect to use cash for investing activities in future periods, when available.

Cash Flows from Financing Activities

During the year ended March 31, 2019, we received $292,500 in cash from financing activities, compared to $751,017 in cash received from financing activities during the year ended March 31, 2018. The proceeds received from financing activities during the year ended March 31, 2019 and March 31, 2018 were advances provided by management to support our day-to-day activities and assets acquired from Vortex Network in the merger.

Recent Developments and Future Financing Activities

In order to execute on our business strategy, we will require additional working capital. We anticipate that we will require a minimum of approximately $2,500,000 in debt and/or equity financing to proceed with our plan of operations over the next twelve months. As we had negative cash and working capital in the amount of $ 602,281 as of March 31, 2019, we do not have sufficient working capital to enable us to carry out our operations for the next twelve months.

We expect to use debt and/or equity financing to fund operations for the foreseeable future, including, without limitation, the sale of at least $2,500,000 of our capital stock pursuant to a private placement for the purpose of financing the contemplated ongoing operations of the Company and Vortex, as previously disclosed on our Current Report on Form 8-K filed with the SEC on October 22, 2018.

Any future sale of additional equity and/or debt securities will result in dilution to current stockholders. We may also seek additional loans where the incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand business operations and could harm our overall business prospects.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders and investors.

Critical Accounting Policies

Our financial statements are affected by the accounting policies used and the estimates and assumptions made by management during their preparation. A complete listing of these policies is included in Note 2 of the notes to our financial statements for the year ended March 31, 2019. We believe the accounting policies utilized in preparing our financial statements conform to the generally accepted accounting principles in the United States (?US GAAP?).

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources.

By their nature, these estimates are subject to an inherent degree of uncertainty, and actual results could differ from such estimates. The actual results experienced by our Company may differ materially and adversely from our Company?s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

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